Finra has barred a former broker who allegedly told clients that the Department of Labor’s fiduciary rule required him to send out forms giving him the right to withdraw advisor fees from their variable annuity accounts.
Between August and December 2016, Louis Cook, then associated with National Planning Corp., allegedly got at least 11 clients to sign a third-party authorization form giving him the right to make changes or withdraw funds from their VA policy values to cover advisory fees, according to a letter of acceptance, waiver and consent published by Finra.
Cook allegedly misrepresented in a cover letter to his customers that the fiduciary rule made the forms necessary, and never submitted his correspondence with the clients for NPC’s review, the industry’s self-regulator says.
Cook then withdrew more than $150,000 from the variable annuity accounts of the clients, many of whom were elderly or the parents of developmentally disabled children, according to Finra.
NPC allowed Cook to resign on November 3, 2017, and Cook registered with Securities Service Network the same month, the regulator says. SSN terminated Cook’s registration in March 2018 following “the conclusion of an internal investigation of Mr. Cook’s fee debiting of client variable annuities,” according to the letter of acceptance.
NPC, meanwhile, then filed an amended Form U5 for Cook, adding a complaint from a customer alleging that "fees were debited from variable annuity without proper disclosure,” the Finra documents show.
Cook never registered with another firm.
Cook consented to Finra’s bar from the industry without admitting or denying the regulator’s findings, according to the letter of acceptance.
The Obama-era fiduciary rule required retirement account advisors to put clients' interests first but was vacated by an appeals court in 2018. The DOL was due to put out a new version of the rule in December 2019 but has yet to do so.